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City analysts upbeat on (some) financial stocks

Last updated: 13:28 12 Feb 2016 GMT, First published: 09:28 12 Feb 2016 GMT

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Investec has today upgraded its recommendation for Standard Chartered (LON:STAN) to ‘buy’ from ‘hold’.

“Given the way 2016 has played out so far, we think it is little surprise that STAN has been (almost) the worst performing UK bank in the year to date,” Investec analyst Ian Gordon said in a note.

At the same time, the outlook for Investec’s (LON:INVP) own shares is improved, according to HSBC, which upgrades the broker and asset manager to ‘buy’ from ‘hold’.

Barclays Capital upgrades Provident Financial (LON:PFG), UK’s sub-prime loan and credit card firm, to ‘overweight’ from ‘equal weight’.

Elsewhere, Barclays and Bank of America Merrill Lynch agreed Henderson Group (LON:HGG) is worth no more than a ‘neutral’ rating, as both firm downgraded the fund manager.

Away from the financial services, Credit Suisse upgraded textile group Berendsen (LON:BRSN) to ‘outperform’ from ‘neutral’.

And Berenberg lifted its recommendation for Irish drug distributor UDG Healthcare (LON:UDG) to ‘buy’ from ‘hold’.

Elsewhere, Investec rates global engineer Rolls (LON:RR.) a sell after today's final results.
 
They were better than reduced expectations due to a series of one-offs, notes analyst Rami Myerson.
 
"Rolls has reiterated the outlook for FY16 EBIT, but EPS will be impacted by a higher tax and interest. 
 
"Whilst the initial pages of the statement read positively, there are a series of concerning details in the increased divisional disclosures, including lower
 
H2 order intake in Power Systems and guidance for increased costs at Defence and Nuclear. 
 
"Our view remains that the premium valuation does not reflect a series of medium and long term challenges to profits and cash."
 
The broker puts its target price of 440p under review.

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